"The9 Signs Definitive Agreement Regarding Share Exchange of Red 5"

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Verterdegete

Verterdegete

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Shanghai, China – April 28, 2016.The9 Limited (the “Company,” NASDAQ: NCTY), an online game operator, today announced that it has signed a definitive agreement (the “Agreement”) with L&A International Holding Limited, a Cayman Islands company with shares listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited under stock code 8195 (“L&A”), and certain other equity holders of Red 5, to exchange approximately 30.6% equity interest (on a fully diluted basis, the “Swapped Red 5 Interest”) that it owns in its subsidiary Red 5 Studios, Inc. (“Red 5”) for 153,896,387 newly issued shares of L&A. The Company currently owns approximately 63.4% equity interest in Red 5 on a fully diluted basis. The total consideration for the transaction for all the participating equity holders, including the Company, is approximately US$76.5 million, implying Red 5’s valuation at US$170 million. The completion of the transaction is subject to customary closing conditions stipulated in the Agreement.



Red 5 is an online game developer based in the United States. Red 5 is developing Firefall, a MMOFPS game, for which the Company has conducted a limited commercial release in China in November 2015 and expect to have a large-scale commercial launch in China in the second half of 2016.
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http://www.the9.com/en/news/2016/news_20160428.html


Anyone here who could explain what this means?
 
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PCMasterReece

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Chevrolet Movie Theater said:
The9 used to own 63.4% of Red5 and is now buying another 30.6 of the company to put its total shares at 94% of the company.
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Wrong, they swapped 30.6% ownership of Red5 to another company in the Cayman Islands called L&A Holdings (A cashmere company.... Yeah not dodgy at all right) for 153,896,387 newly issued shares of L&A.

They haven't bought anymore of Red5. Also this was back in April.
 
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NitroMidgets

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Jul 27, 2016
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It swapped ownership of a dead company for ownership in a potentially dead company once The9 starts trying to change things. L&A employees should start sending out resumes ASAP.
 
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NitroMidgets

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Jul 27, 2016
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Sorry.
I thought this part of the Safe Harbor Statement was funny though.
"The9’s ability to retain existing players and attract new players,"
So, does that mean the deal already fell apart or is about to? Remember they don't have to issue updates to these deals.

Oh for the year they list revenue of 7.5mil and earnings of -46.94mil
No wonder they pulled the plug. So odd the stock price isn't vastly lower with that kind of performance.

http://www.thestreetsweeper.org/article.html?c=3&i=22226
That article summed up The9 Limited really well and it was from Dec 2015. Things have only gotten worse since then.
 
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Hoopdy

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Jul 27, 2016
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The9 was probably the worst possible thing to happen to Red5's team in the process of making this game. Perhaps it was needed, maybe they were in dire straights in terms of funding, but The9 did nothing but bleed the project dry, and gave a middle finger to senior supporters and long-time veterans of the game alike. I wish things could've went better...shame it didn't.

At least now's an opportunity to get a better ending from this.
 
Nakiato

Nakiato

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Jul 26, 2016
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Well, it's interesting. Without The9 Firefall would have never been a thing because crowdfunding wasn't a major thing at the time. Investors were pretty much their only option. The9 was the only one that wanted to touch the project. It may have turned out poor in the end, but at least we got to see something made. That and everyone at Red 5 got to have jobs and get work experiace to put on a resume. With how the market has changed, hopefully Ember could succeed where Firefall would have never had the chance.
 
DeyjaVou

DeyjaVou

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Jul 27, 2016
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Nakiato said:
Well, it's interesting. Without The9 Firefall would have never been a thing because crowdfunding wasn't a major thing at the time. Investors were pretty much their only option. The9 was the only one that wanted to touch the project. It may have turned out poor in the end, but at least we got to see something made. That and everyone at Red 5 got to have jobs and get work experiace to put on a resume. With how the market has changed, hopefully Ember could succeed where Firefall would have never had the chance.
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True they saved it back in 2011-2012, and they were they only ones who wanted to touch it. But they didn't just touch it, they picked it up and threw it on the ground.
 
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